You have a decision to make when it comes to taking RMDs from your IRAs. You're allowed to take them all from one, or one from all. The post Which Account to Take your RMDs From appeared first on Getting Your Financial Ducks In A Row. Related posts: Contingent Beneficiary Designation Have Confidence – In Good Times and Bad Book Review: Stacked – Your Super Serious Guide to Modern Money Management ..read more

An IRA distribution can be used to reduce or eliminate those pesky quarterly estimated tax payments. See how. The post Using an IRA Distribution and Withholding to Reduce Estimated Tax Payments appeared first on Getting Your Financial Ducks In A Row. Related posts: Roth Conversion Planning for a Small Business Owner or Farmer What to do When You Receive a Notice From the IRS Do You Need a Friend at the IRS ..read more

Is there a way to use the prohibited transaction rules for IRAs in your favor? Hypothetically, there seems to be. The post Using the Prohibited Transaction Rules to Your Advantage appeared first on Getting Your Financial Ducks In A Row. Related posts: Organization, Efficiency & Discipline Make the Most of the Gift of Time How PIA Relates to Your Benefit ..read more

Do you know what due diligence is for claiming credits on your income tax return? If you use a preparer, you can bet he or she does. The post Earned Income Credit and Due Diligence appeared first on Getting Your Financial Ducks In A Row. Related posts: 10% Penalty Applied to Roth Conversion? Maybe Social Security Earnings Test The Net Investment Income Tax and How to Avoid It ..read more

Photo credit: jb Often we find ourselves in situations that we never dreamed of – like owing the IRS a considerable amount of money. Maybe you earned a lot more than you expected, perhaps you had a filing status change that dramatically changed your tax rate, or maybe there was a change to your deductions. It doesn’t matter, you’ve found yourself in the situation – what should you expect? While the majority of Americans get a tax refund from the Internal Revenue Service each year, there are many taxpayers who owe and some who can’t pay the tax all at once. The IRS has a number of ways for pe ..read more

Photo credit: jb I’ve written about this topic a few times in the past, such as in this article on tax diversification of your investment accounts. It’s an important topic, but probably the most important subtopic is having a significant portion of your investments not only in tax-deferred accounts, like 401(k) or IRA, but also in regularly-taxed accounts. Roth-type accounts are also critically important, but given the limited availability and costly nature of getting assets into a Roth-type account, I’ll focus for now on the importance of the taxable investment account. With a taxable inves ..read more

Photo credit: jb With all the talk about how Social Security is running out of money (or will be, currently projected at 2035), one of the topics that often comes up is the age limits for benefits. As you’re probably aware, the Full Retirement Age (FRA) has been adjusted upward from the original age 65, gradually to age 67 for folks who were born in 1960 or later. This upward adjustment was put into place with the 1983 amendments, ostensibly to reduce the outflows for the system. With that adjustment in place, and the resulting benefit that the system has received from making that change, yo ..read more

Photo credit: jb Suppose you have a situation where you’d like to leave your IRA (or at least some of it) to a family member or a group of beneficiaries, and then leave the remainder of the IRA to a charity of your choice. One way to do this is to split the beneficiary designation between your family members and the charity. This is a simple way to make this designation, but it might not really achieve the purpose you’re hoping to. Suppose you’d like to make certain that a non-spouse family member has adequate income from your IRA for the remainder of his or her life, but you don’t want to o ..read more

Photo credit: jb Many times it is among the best of ideas to establish a Roth IRA for your child. This way, your child can benefit from the long-term growth in the account and have a very good head start on retirement savings for later in life. There are other benefits, including the fact that retirement funds are not included when financial aid is being calculated for college expenses, as well as providing funds for the child to use when the time comes to buy a house, for example. One thing can cause a real problem though: if you undertake to make contributions to a Roth IRA for your child ..read more

Photo credit: diedoe I occasionally receive this question: Can I make a non-deductible IRA contribution, and then shortly after convert the IRA into a Roth IRA? My income is too high for me to make a contribution directly to a Roth IRA. (This is also known as a back-door Roth IRA contribution.) According to the rules in place today, you can do this. Here are the applicable rules: There is no income limit for an individual to make a non-deductible IRA contribution. There is no income limit for an individual to make a Roth Conversion. There is no time limit on how long a contribution must be ..read more